Eric Posner is a Professor of Law at the University of Chicago and a fellow of the American Academy of Arts and Sciences. His research interests include antitrust law, financial regulation, international law, and constitutional law.
Glen Weyl founded the special Microsoft Research project ‘Plural Technology Collaboratory’ and directs its research. He is also the founder of the RadicalxChange foundation and the founder and chairman of the Plurality Institute.
Radical Markets: Uprooting Capitalism and Democracy for a Just Society [i] : Conceptualizing the victory of Homo Economicus The economic orthodoxy governing the West is crumbling. Growing inequalities, corporate concentration, wage stagnation: is our capitalism still viable? Eric Posner and Glen Weyl propose a surprising answer in their 2018 book : rather than abandoning markets, we should extend them to new domains.
The Diagnosis: A Multifaceted Crisis In the United States, labor’s share of added value has been declining for over 40 years. Competition has dramatically decreased, allowing corporations to extract excessive profits. The promises of “trickle-down economics” have failed. For the authors, these dysfunctions stem from one problem: markets are not free and developed enough. Whether for everyday possessions, user data from our online activities, our political system, or immigration, the authors propose creating or improving market systems to revolutionize how our societies function.
Property as Monopoly The authors draw a parallel with the British crisis of the 19th century. Between 1750 and 1850, concentrated land ownership hindered industrialization. Henry George then proposed a tax on the unused value of land to encourage its productive use. Land is indeed a particular good because it exists in limited quantity, and exclusive private ownership can lead to very inefficient allocations (speculation, opposition to projects of common interest…). For the authors, this applies to practically all our possessions, which are often used well below their economic potential. They propose the COST system (Common Ownership Self-Assessed Tax): each person declares the value of their goods and pays taxes proportional to the declared value, but anyone can buy these assets at the declared price. This system forces honesty: declaring too low exposes one to forced buyout, declaring too high is expensive in taxes. Gone is absolute security over one’s goods, but a system that favors productive use of assets.
Quadratic Voting The “one person, one vote” system fails to measure the intensity of preferences. Someone passionate has the same power as an indifferent person. The “quadratic voting” proposed by Posner and Weyl is based on a simple idea: each voter would have a number of credits they can spend to vote for candidates of their choice, or particular measures. To avoid “tyranny of the majority,” strategic voting problems, and influence buying, the credit cost of each additional vote for the same measure would be quadratic: one vote costs one credit, two votes cost four credits, three votes cost nine credits, etc. This structure prevents the wealthy from dominating all decisions and forces everyone to prioritize their battles. Colorado has successfully tested this system.
Migration as a Market When a Mexican crosses the border to the United States, their salary increases by more than 200%. Opening borders could double global GDP. The authors propose a sponsorship system: any citizen could sponsor a migrant and receive a portion of their income in exchange for integration assistance. This would create a private market aligning the interests of natives and immigrants.
Dismantling Modern Monopolies Tech giants dominate their markets. The problem according to the authors? “Common ownership”: when BlackRock, Vanguard, and State Street hold shares in competing companies in the same sector, these companies have fewer incentives to compete with each other. This institutional ownership has grown from 4% in the 1980s to almost 30% today. Their proposal is to prohibit common ownership of multiple major companies in the same sector. This would reduce incentives for implicit collusion and increase competition between firms, thus improving the final quality-price ratio for consumers.
Data as Labor AI depends on data generated by our activities: searches, posts, purchases. This contribution is not compensated. The authors propose recognizing this contribution as labor deserving remuneration, with collectives of “data workers” negotiating with tech giants. In this system, AI algorithms would compensate users according to the marginal economic value their data provides to AI in the market. This would allow redistribution of the “informational rent” from tech giants to consumers.
Critical Evaluation & Conclusion The approach is intellectually ambitious but raises several questions. Can market mechanisms account for social values beyond efficiency? The COST system would create significant disruptions. Wouldn’t living under the constant threat of others buying our possessions create intolerable anxiety? Quadratic voting represents a fundamental change from democratic principles of political equality. The migration proposal raises questions about the commodification of human relationships. More fundamentally, this vision requires societal comfort with economic instability that may be unrealistic. Constant revaluation of values, fluctuating prices, perpetual markets: many value stability more than maximum efficiency. This is a blind spot of liberal philosophy that only considers individuals, not social structures. No sociologist is cited, reinforcing the idea that the authors, despite their stated desire not to be categorized as “neither right nor left,” actually have a bias. However, this European reading must be nuanced, as the authors are American, a country where the left/right dichotomy is defined differently than in Europe.
Perhaps the book’s greatest contribution is expanding our imagination about what markets could be. The authors remind us that economic institutions are human creations that can be redesigned. Their vision challenges the false choice between market fundamentalism and anti-market populism, offering a provocative starting point for rethinking our economic future.
Ange Blanchard – PhD candidate, CEC
[i] Posner, E., Weyl, G. , , Ed. Princeton University Press, May 2018, pp. 368.